KISAN MOULDINGS LIMITED

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3 KISAN MOULDINGS LIMITED 5 Year Highlights Rs. in Lacs Description SOURCES OF FUNDS Share Capital Reserves 2,083 2,360 2,714 2,895 3,720 Net Worth 2,313 2,580 2,936 3,151 4,101 Borrowings 3,747 4,030 5,770 6,301 11,001 Funds Employed 6,534 7,094 9,188 10,463 16,296 INCOME & PROFITS Sales & Other Income 10,466 12,496 14,953 16,947 21,953 Opertaing Profit before Interest and Depreciation 1,123 1,166 1,440 1,718 2,111 Profit Before Tax Tax Profit after Tax Dividend/Dividend Tax Retained Earnings 974 1,201 1,495 1,660 1,941 OTHER DATA Gross Fixed Assets 4,861 5,422 6,581 7,112 10,341 Debt Equity Ratio Net Worth Per Equity Share - Rs Earnings Per Equity Share - Rs Dividend per Equity Share - Rs Profit After Taxes as % to Average Nert worth

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10 21 st Annual Report BOARD OF DIRECTORS Ramesh J. Aggarwal Chairman Vijay J. Aggarwal Vice Chairman-1 and Whole Time Director Ashok J. Aggarwal Vice Chairman - 2 R. D. Suvarna S. S. Gupta S. K. Jain T. B. Subramaniam Sunil Goyal Kunal R. Aggarwal Monika Seth Satish J. Aggarwal - Managing Director Sanjeev A. Aggarwal Joint Managing Director STATUTORY AUDITORS M/s Mittal & Associates Chartered Accountants COMPANY LAW ADVISORS M/s. Rathi & Associates Company Secretaries COMMITTEES OF THE BOARD 1. AUDIT COMMITTEE T. B. Subramaniam - Chairman Sunil Goyal S. K. Jain 2. REMUNERATION COMMITTEE S. K. Jain - Chairman R. D. Suvarna Sunil Goyal 3. SHAREHOLDERS /INVESTORS GRIEVANCE COMMITTEE S. S. Gupta - Chairman Vijay J. Aggarwal T. B. Subramaniam Ashok J. Aggarwal 4. PERFORMANCE REVIEW COMMITTEE Satish J. Aggarwal - Chairman Sanjeev A. Aggarwal T. B. Subramaniam Sunil Goyal BANKERS Punjab National Bank Union Bank of India The Shamrao Vithal Co-op. Bank Ltd. IDBI Bank Ltd. REGISTERED AND ADMINISTRATIVE OFFICE Tex-Centre, K- Wing, 3 rd Floor, 26-A, Chandivli Road, Near HDFC Bank, Off. Saki-Vihar Road, Andheri (East), Mumbai Website : WORKS Survey No. 64/1, 63/1, 70, 71, 72, 74/1/1 Village Mahagaon, Taluka Palghar, Boisar Dist. Thane. T -110/111, MIDC, Tarapur Boisar, Dist. Thane (Maharashtra). Survey No. 34/1/1, Village-Umerkui, Silvassa- D. & N. H. (U. T.). Plot No.67 to 74 and 80 to 89, Birkoni Industrial Area, Mahasammund, Chhattisgarh Plot No 5/A/5 Industrial Area No. 2, Dewas Plot No 127/2, 128/1, Village Bir Plassi, Tehsil Nalagarh, Solan REGISTRAR AND SHARE TRANSFER AGENT Sharex (India) Private Limited, Unit-1, Luthra Industrial Premises, Safed Pool, Andheri Kurla Road, Andheri (East), Mumbai LISTING Bombay Stock Exchange Limited. 8

11 KISAN MOULDINGS LIMITED CONTENTS Page No(s). Directors Report Management Discussion and Analysis Report on Corporate Governance Auditors Report Balance Sheet Profit and Loss Account Schedules 1 to Cash Flow Statement Balance Sheet Abstract Notice

12 21 st Annual Report DIRECTORS REPORT The Members, Your Directors have pleasure in presenting the Twenty-first Annual Report on the operations of the Company together with the Audited Accounts for the year ended 31 st March, FINANCIAL RESULTS: (Rs. in Lacs) Particulars 10 Current Year ( ) Previous Year ( ) Sales Other Income Profit before Depreciation, Interest and Tax (PBDIT) Less: Interest Less: Depreciation Profit before Tax Provision for Taxation Income Tax Provision for Taxation Deferred Tax (34.14) Provision for Taxation FBT Profit after Tax Balance brought forward Balance available for appropriation APPROPRIATIONS : Amount transferred to General Reserves Proposed Dividend Dividend Tax Balance carried to Balance Sheet Performance: During the year under review, your Company continued to maintain its upward trend by registering Sales of Rs lacs as against Rs lacs in the previous year. Profit before Depreciation, Interest and Tax has increased from Rs lacs to Rs lacs. After providing for Interest costs and Depreciation amounting to Rs lacs and Rs lacs respectively, the Profit before Tax for the year under review has increased to Rs lacs as compared to Rs lacs in the previous year. Net profit after Tax for the year has increased to Rs lacs as compared to Rs lacs in the previous year. Barring unforeseen circumstances, your Directors are confident of achieving better results in the ensuing year. Dividend: Your Directors are pleased to recommend a dividend at the rate of 12% on the Paid up Equity Share Capital of the Company for the year ended 31 st March, Allotment of Equity Shares pursuant to conversion of 40,00,000 Optionally Fully Convertible Warrants. The Company had after obtaining necessary approval from the Shareholders of the Company, allotted 40,00,000 Optionally Fully Convertible Warrants (OFCW), of which 20,00,000 to Promoter Group including persons acting in concert with them and 20,00,000 to Persons other than promoter group. As per the terms of the issue the said Warrants were convertible into One Equity Share at a premium of Rs. 23 per share for every Warrant held within 18 months from the date of allotment. During the year under review, the Company had converted 19,51,625 Warrants into Equity Shares. The balance 20,48,375 Warrants were also subsequently converted into Equity Shares on 5 th April, Directors Responsibility Statement: Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm the following: that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

13 KISAN MOULDINGS LIMITED that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year. that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. that the directors had prepared the Annual Accounts for the Financial Year ended 31st March, 2010 on a going concern basis. Public Deposits: The deposits accepted by the Company are in accordance with the provisions of Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975 as amended. Report on Corporate Governance Compliances and Management Discussion and Analysis: As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Management Discussion and Analysis and Corporate Governance along with the Certificate by M/s. Rathi & Associates, Practicing Company Secretaries regarding compliance of conditions of Corporate Governance, form part of the Annual Report. Directors: In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Ashok J. Aggarwal, Shri Ramesh J. Aggarwal and Shri R. D. Suvarna, Directors of the Company, shall retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting. The Board of Directors have as per the recommendation of the Remuneration Committee, appointed Shri Vijay J. Aggarwal as Vice Chairman 1 and Whole Time Director for a period of three years starting from 01 st January, 2010 and re-appointed Shri Sanjeev A. Aggarwal as Joint Managing Director and Shri Satish J. Aggarwal as Managing Director for a period of three years starting from 01 st October, 2010, subject to the approval of the shareholders at the ensuing Annual General Meeting. A brief profile of the above mentioned Directors, as required by clause 49VIA of the Listing Agreement with the Stock Exchange is attached to the Notice of the ensuing Annual General Meeting. Auditors: M/s. Mittal & Associates, Chartered Accountants (Firm Registration No W), the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. The retiring Auditors have furnished a certificate of their eligibility for re-appointment under Section 224(1B) of the Companies Act, 1956 and have indicated their willingness to continue as auditors. Auditors Comment: The observations made by the Auditors in the Auditors Reports read with relevant notes given in the Notes on Accounts are self explanatory and therefore do not call for any further comments under Section 217 (3) of the Companies Act, Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo: The relevant data pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this report, as per Annexure A. Particulars of employees: Pariculars of employees, whether employed for the whole year or part thereof, who were in receipt of remuneration aggregating to or in excess of the limits specified under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is furnished vide Annexure B attached herewith. Acknowledgements Your Directors take this opportunity to express their gratitude for the support and co-operation received during the year from the Investors, Financial Institutions, Bankers, Statutory Authorities and all organizations connected with its business. Your Directors also take pleasure in commending the valuable contributions made by the employees of the Company at all levels during the year. For and on behalf of the Board Place : Mumbai Satish J. Aggarwal Vijay J.Aggarwal Date : 29 th May, 2010 Managing Director Vice Chairman- 1 and Whole Time Director 11

14 21 st Annual Report ANNEXURES TO THE DIRECTORS REPORT Annexure A Information under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31 st March, A. POWER AND FUEL CONSUMPTION Unit Electricity Purchased KWH 1,42,08,954 1,17,48,607 Total Amount Rs. in lacs Average rate per unit Rs B. TECHNOLOGY ABSORPTION The Company has not imported any technology from abroad. Innovation is a constant process and the Company has been engaged in improving the product design, material cost, productivity, etc. as part of this process. C. FOREIGN EXCHANGE EARNING AND OUTGO Total Foreign Exchange earned Total Foreign Exchange used Rs Lacs Rs Lacs Name of the Employee Annexure B Particulars of Employees Under Section 217 (2A) of the Companies Act, 1956 Age Designation Gross Remuneration (Rs. in lacs) Qualification Experience (in years) Date of Joining Previous Employment A: Employed throughout the financial year. Satish J Aggarwal 63 Managing Director B. Sc /09/1992 NA Sanjeev A. Aggarwal 53 Joint Managing Director B. Employed for part of the Financial Year Vijay Aggarwal 65 Vice Chairman 1 and Whole time Director B. Com /08/2005 NA 6.00 B. Com /06/1995 NA For and on behalf of the Board Place : Mumbai Satish J. Aggarwal Vijay J.Aggarwal Date : 29 th May, 2010 Managing Director Vice Chairman- 1 and Whole Time Director 12

15 KISAN MOULDINGS LIMITED MANAGEMENT DISCUSSION AND ANALYSIS We, Kisan Mouldings Limited, are truly inspired by the eternal symbol of mankind s progress. The glory of Plastic itself needs no introduction. Its versatile capabilities, added with the flexibility to use it in packaging, irrigation, telecommunication, storage, construction, automobiles, furniture, medicine, aviation, defence and large number of other sectors, are indeed a fascination to all of us. The Company is a leading manufacturer of Plastic Moulded Fittings and Furniture, with an objective to provide highest quality standard products to its customers. To meet the customers demand at every level is the vital force that drives the organization towards higher performance standards of manufacturing and product quality. To achieve this at every stage of manufacturing cycle, the Company has set the Six P Progress Maxim based on Policy, Product, Process, Prevention, Protection and Project, enabling it to stay at the forefront of Manufacturing Technology. Our professionally qualified team of technologist and engineers ensure a high satisfactory level of products in all respects. A. INDUSTRY OVERVIEW: The demand for Plastic Moulded Fittings and Furniture is expected to increase considering growth of user industries viz. automobiles, consumer durables, telecommunication equipment, industrial fittings, pipes and other home appliances. There are a number of players in the Industry, many in SSI Sector. Therefore, the Markets & Capacities are fragmented in the Country. Due to some concessional rate of excise duty granted to SSI Sector, the competition is intense. The development of the plastic industry is linked with the country s economic development. It has ancillary relationship with several large industries including multinational companies both in India and abroad. The various overseas players wish to explore the Indian market and invest in opportunities thrown open by the country, projected to be world number 3 in plastics consumption by The Government of India is endeavouring to achieve GDP growth of more than 7% in the next 10 years. B. PERFORMANCE: The year gone by was a year full of achievements for the Company. The Company has improved its performance significantly in the previous year. The Company is involved in manufacturing Plastic Moulded Fittings and Furniture, Moulded Agri, Fittings and Suction Pipes PVC Solvent, Rubber Lubricant. In order to expand the business further, the Company entered into a Business Conducting Agreement with M/s. Reliance Industrial Products, a partnership firm to use its manufacturing facilities for Company s production on as-is-where-is basis. The firm is in the same industry and will be providing manufacturing facilities exclusively for the usage of the Company on Job Work basis. The figures of production and sales for the products being manufactured by the Company are furnished in the Notes on Accounts. C. FUTURE OUTLOOK Plastic products are going to be optimistic in the coming years in the World market. In past years, the domestic industry has performed very well and demands for the plastic products have been ever increasing. Perceptibly it has a bright future. The Company has built itself to face each and every market challenges. Our Company is sure of achieving its goals by its un-definable and its operational efficiencies. Looking at the growing demand of the Plastic Moulded Furniture and to introduce a new set of exclusive furniture items, the Company has proposed to increase the installed capacity of Furniture Division by setting up additional machines. Your Company seeks to be a cost effectual high quality creator and is alert on maintaining its cost competitiveness in order to avail benefits of large scale production at one place and therefore the Company is in process to relocate its existing manufacturing units at one place. D. OPPORTUNITIES AND THREATS After liberalization of the economy in 1992, the Government of India has been quite supportive of industry in general, taking many steps over the years for the conducive growth of business. The Plastic Industry in India has also made significant achievements ever since it made a modest but promising beginning by commencing production of Polystyrene. It is quite possible that plastics could grow at 14%, based on historical performance. This seems a very achievable position as since the past decade, the Indian plastic industry continues to grow at double digit figures. The potential Indian market has motivated Indian entrepreneurs to acquire technical expertise, achieve high quality standards and build capacities in various facets of the booming plastic industry. Our Company has all the requisites for growth and to become the torch bearer path guide in its segment. The Company believes that commitment and consistency in dealings with customers are primary pre-perquisites for flourishing and unremitting business rapport. This principle controls all 13

16 21 st Annual Report aspects of the Company s loom to its customers. The Company s opportunities lie in the sufficient demand for the Plastic Moulded Fittings which has various applications in water management and constructions. With the construction Industry successful in India, the Company has adequate market to sell its products. Further, having upgrading of the new PE-AL- PE combined Pipes the Company is poised to grow in all respect. The Company has sustained intense competition in its segment and has created its own different image. The Company has a wide dealer network spread all over the country through which the Company has already established its presence in the market. The Company has more than a decade of rich experience of serving its customers beyond their expectations. With the growth of the industry and introduction of new products and technology, the industry presents excellent opportunity for growth and profit earning for the leading and established players. The Company may face tough competition from the leading players in the Industry. E. RISKS AND CONCERNS: In the highly competitive market subject to rapid technological changes and regulatory developments, the Company s ability to manage diverse risks determines its success. As the business environment remains challenging and scale becomes the most critical component for survival, the Company continues to invest in growth drivers namely people and processes besides the expansion plan so as to remain in the race at a good position. The Company continues to remain focused on its core competence product i.e. PVC Moulded Fittings. The Company is also prone to certain risks and concerns such as increase in material costs, competition from un-organized sector, increase in capital costs to meet the increased demand for new products. Low value addition and stiff competition in the market continues to have an impact on the Company s realizations and also exerts pressure on the margins. F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an elaborate system of internal controls to ensure optimal utilization of Company s resources and protection thereof, facilitating accurate and speedy compilation of accounts, management information reports and compliance with statues, laws and regulations. The Company has a well defined organization structure, authority levels and internal guidelines and rules for conducting business. The Internal Auditors conduct regular audits to ensure adequacy of internal control systems, adherence to management instructions and compliance with laws and regulations of the country. G. HUMAN RESOURCE DEVELOPMENT Human Resources continue to be an invaluable and intangible asset and key success factor for the Company to grow and sustain its market position in a highly competitive and challenging environment. We firmly believe that people are the pivotal force behind the growth and excellence in business operations. The overall performance and the market position, the Company enjoys because of the result of the aggregate strength of its people. H. CAUTIONARY STATEMENT: Statement in the Management Discussion and Analysis describing the Company s objectives, projections, expectations, estimations are based on current business environment. Actual results could differ from those expressed or implied based on future economic and other development. Important factors that could make a difference to the Company s operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the company operates, changes in the government regulations, tax laws and other statutes and other incidental factors. 14

17 KISAN MOULDINGS LIMITED A. Company s Philosophy: REPORT ON CORPORATE GOVERNANCE The essence of Corporate Governance lies in its transparency and its efficiency lies in its ability to protect the stakeholder s interest. The Company s governance process and practice has been framed and designed to achieve a transparency and professionalism in action as well as the implementation of policies and procedures to ensure high ethical standards as well as responsible management. The governance process is such as to ensure proper utilization of resources in a manner intended to meet the expectations of all the Stakeholders. The Company believes in meeting the obligations of all the stakeholders, including amongst others, shareholders, customers, employees and the community in which it operates. The Company s corporate governance policies and practices for are as under: The Company has following tiers of the Governance Pyramid: Shareholders Board of Directors Committees of the Board Executive Management Each of the tiers operates within the given parameter as per prevailing laws and regulations or the practices prevalent in the industry. B. Board of Directors: i. Board Composition The Company recognizes the need and importance of having a strong and broad based Board and hence has maintained an optimum combination of Executive and Non-Executive Directors. The composition of the Board is in accordance with the requirements of the Corporate Governance Code of the Listing Agreement with the Stock Exchanges. The Board of Directors comprises of majority of Non-Executive Directors, having rich and varied experience and imparts the desired level of independence to the Board. Therefore, the Board of Directors of the Company consists of optimal combination of Executive, Non-Executive and Independent Directors. As on 31 st March, 2010 the Board of Directors has three (3) Executive Directors and nine (9) Non-Executive Directors of which five (5) are Independent Directors. The Chairman of the Board was an Executive Director. However with effect from 1 st February 2010, the Chairman has relinquished his position of an Executive Director. Hence, presently the Chairman of the Board is a Non-Executive Director. The day-to-day management of the Company is conducted by the Executive Directors subject to the supervision and control of the Board of Directors. The Managing Director of the Company is assisted by a Joint Managing Director and a Vice Chairman 1 and Whole Time Director. The constitution of the Board and other relevant details relating to Directors as on 31 st March, 2010 are as under: Director Category Number of other Directorships* Committee Memberships # Committee Chairmanships # Shri Ramesh J. Aggarwal Chairman and Director Non-Executive Shri Satish J. Aggarwal Managing Director Executive Shri Vijay J. Aggarwal ** Vice Chairman - 1 and Whole Time Director Executive Shri S. S. Gupta Non-Executive Independent Shri R.D. Suvarna Non-Executive Independent

18 21 st Annual Report Director Category Number of other Shri S.K. Jain Shri T.B. Subramaniam Shri Sanjeev A. Aggarwal Non-Executive Independent Non-Executive Independent Joint Managing Director Executive Shri Ashok J. Aggarwal Vice Chairman - 2 Non-Executive Shri Sunil Goyal Non-Executive Independent Directorships* Committee Memberships # Committee Chairmanships # Shri Kunal Aggarwal*** Non - Executive Smt Monika Seth**** Non - Executive * Other Directorships exclude Directorships held in Private Limited Companies. # Committee of Directors includes Audit Committee, Shareholders/Investors Grievance Committee, Performance Review Committee and Remuneration Committee of Directors only. ** w.e.f. 01/01/2010. *** w.e.f. 01/02/2010. **** Appointed w.e.f. 25/04/2009. ii. Board Meetings and Attendance of Directors The Board meets at least once in a quarter to consider amongst other businesses the performance of the Company and quarterly financial results. Additional Board Meetings are held as and when necessary. The Board meetings are generally held at the Registered Office of the Company at Mumbai. Agenda for each meeting along with explanatory notes are drafted and distributed well in advance to the Directors. Every Board Member is free to suggest the inclusion of items on the agenda. During the financial year ended 31 st March, 2010, the Board met Six times i.e. on 25 th April, 2009, 29 th June 2009, 31 st July 2009, 31 st October 2009, 12 th December, 2009 and 1 st February The details of attendance of Directors at Board Meetings held during the financial year and the last Annual General Meeting are as under: Name of the Director Number of Board Meetings held 16 Number of Board Meetings attended Whether attended last AGM Shri Ramesh J. Aggarwal 6 5 Yes Shri Satish J. Aggarwal 6 6 Yes Shri Vijay J. Aggarwal 6 2 Yes Shri S.S. Gupta 6 1 Yes Shri R.D. Suvarna 6 1 Yes Shri S.K. Jain 6 5 Yes Shri T.B. Subramaniam 6 3 Yes Shri Sanjeev A. Aggarwal 6 6 Yes Shri Ashok J. Aggarwal 6 3 Yes Shri Sunil Goyal 6 3 Yes Shri Kunal R. Aggarwal 6 3 Yes Smt. Monika Seth * 6 0 No * Appointed w.e.f. 25/04/2009.

19 KISAN MOULDINGS LIMITED C. Board Committees Currently, four Committees have been constituted by the Board viz: 1. Audit Committee 2. Shareholders /Investors Grievance Committee 3. Remuneration Committee 4. Performance Review Committee Three of these committees are chaired by Non-Executive/Independent Directors and one Committee by Executive Director. As on date, the Audit Committee comprises of all Non-Executive Independent Directors. The Shareholders / Investors Grievance Committee comprises of two Non Executive Independent Directors, one Non- executive Director and one Executive Director. The Remuneration Committee comprises of three Non-executive Independent Directors. The Performance Review Committee comprises of four Directors, of which two are Executive and two are Non-executive Independent Directors. The Board is responsible for constituting, assigning, co-opting and fixing the terms of reference for Committee members of the said Committees. Recommendations of the committees are submitted to the Board for approval. The quorum for committee meeting is two members or one-third of the total number of members of the committee, whichever is higher. Draft minutes of the committee meetings duly initialled by the Chairman of the respective committee meeting is circulated to the members of that committee for their comments and thereafter, confirmed in its next meeting. The Board of Directors also takes note of the minutes of the meetings of the committees, at their Board Meeting. 1. Audit Committee: Terms of reference a. Primary Objectives of the Audit Committee As required under Section 292A of the Companies Act, 1956 read with the provisions of Clause 49 of the Listing Agreement(s) with the Stock Exchange(s), the Board has constituted an Audit Committee. This Committee acts as a link between the Statutory Auditors and the Board of Directors. It addresses itself to matters pertaining to adequacy of internal controls, reliability of financial statements and other management information and adequacy of provisions of liabilities. The primary objective of the Audit Committee (the Committee ) is to monitor and provide effective supervision of the management s financial reporting process with a view to ensure accurate, timely and proper disclosures and the transparency, integrity and quality of financial reporting. The terms of reference of the Audit Committee are as outlined in the Companies Act, 1956 and the Listing Agreement. The Committee oversees the work carried out in the financial reporting process by the management, including the independent auditor and notes the process and safeguards employed by each. b. Scope of the Audit Committee 1. Provide an open avenue of communication between the independent auditor and the Board of Directors ( BOD ) 2. Recommending the appointment and removal of statutory auditors, fixation of audit fees and also to approve the payment for other services. 3. Meet four times a year or more frequently as circumstances require. The Audit Committee may ask members of management or others to attend meetings and provide pertinent information as necessary. 4. Confirm and assure the independence of the external auditor. 5. Review with independent auditor the co-ordination of audit efforts to assure completeness of coverage, reduction of redundant efforts and the effective use of all audit resources. 6. Consider and review with the independent auditor the adequacy of internal controls including the computerised information system controls and security. 7. Reviewing with the management, the quarterly financial statements before submission to the Board for approval. 17

20 21 st Annual Report Reviewing with the management the annual financial statements before submission to the Board, focusing primarily on: a. b. c. d. e. Any changes in the accounting policies and practices The going concern assumption Compliance with accounting standards Compliance with stock exchange and legal requirements concerning financial statements Significant adjustment arising out of audit Consider and review with the management and the independent auditor: a. b. Significant findings during the year, including the status of previous audit recommendations, Any difficulties encountered in the course of audit work including any restrictions on the scope of activities or access to required information. Review of the following information: a. b. c. Management discussion and analysis of financial condition and results of operations; Statement of significant related party transactions submitted by the management; Management letters/letters of internal control weaknesses issued by the Statutory Auditors. c. Composition of the Audit Committee as on 31 st March 2010: The Audit Committee is constituted in accordance with the Corporate Governance Code of the Listing Agreement and the provisions of Section 292A of the Companies Act, 1956 and comprises of all Non-Executive Independent Directors. Shri T. B. Subramaniam, a Non-Executive Independent Director acts as the Chairman of the Committee. The statutory auditors are invited to the Audit Committee meetings whenever required. The quorum for the Audit Committee meeting is two members. The Audit Committee currently comprises of the following: 1. Shri T.B. Subramaniam - Chairman (Non executive Independent Director) 2. Shri Sunil Goyal - Member (Non executive Independent Director) 3. Shri S. K. Jain * - Member (Non executive Independent Director) * Appointed w.e.f. form 29/05/2010 Note : 1. Shri S.S. Gupta was a member of the Audit committee up to 31 st October, Shri Vijay J. Aggarwal was inducted as a member of the Audit committee from 31 st October, 2009 and resigned on 29 th May, d. Audit Committee meetings and attendance during the financial year ended 31 st March 2010: During the financial year ended 31 st March, 2010, five Audit Committee meetings were held i.e. on 25 th April 2009, 29 th June 2009, 31 st July 2009, 31 st October 2009 and 1 st February, The table hereunder gives the attendance record of Members of the Audit Committee. Name of the Members No. of meetings held No. of meetings attended Shri T.B. Subramaniam 5 5 Shri Sunil Goyal 5 4 Shri S.S. Gupta* 5 2 Shri Vijay J. Aggarwal**# 5 2 Shri S. K. Jain## - - * Up to 31 st October 2009 ** w.e.f. 31 st October 2009 # up to 29 th May, 2010 ## w.e.f. 29 th May,

21 KISAN MOULDINGS LIMITED The Committee has recommended to the Board the appointment of M/s. Mittal & Associates, Chartered Accountants as the statutory auditors of the Company for the Financial Year and that necessary resolution for appointing them as auditors be placed before the shareholders. 2. Remuneration Committee: The broad terms of reference of the Remuneration Committee is to ensure that the remuneration practices of the Company in respect of the Senior Executives including the Executive Directors are competitive keeping in view prevalent compensation packages so as to recruit and retain suitable individual(s) in such capacity. The Committee comprises of the following members: 1. Shri S.K. Jain Chairman (Non executive Independent Director) 2. Shri R.D. Suvarna Member (Non executive Independent Director) 3. Shri Sunil Goyal Member (Non executive Independent Director) The Remuneration Committee met once on 31 st October, 2009 during the Financial Year ended March 31, 2010 and all the members were present in the said meeting of the Remuneration Committee. Remuneration Policy: The Non-executive Directors of the Company are paid sitting fees for attending the Board Meetings. The appointment and remuneration of the Managing Director, Joint Managing Director and Vice Chairman 1 and Whole Time Director is governed by resolutions passed by the Board of Directors and shareholders of the Company, which covers terms of appointment, read with the service rules of the Company. Remuneration paid to the Managing Director, Joint Managing Director and Vice Chairman 1 and Whole Time Director is recommended by the Remuneration Committee, approved by the Board and is within the limits set by the shareholders at the General Meeting. Presently, the Company does not have any stock option plan or performance linked incentives for its Directors. Details of Remuneration paid to all the Directors for the Financial Year ended 31 st March, 2010 are as under: (Rs. In Lacs) Name of the Directors Sitting Fees paid for Salary & Perks Board Meetings Committee Meetings Shri Ramesh J. Aggarwal Shri Satish J. Aggarwal Shri Vijay J. Aggarwal Shri S.S. Gupta Shri R.D. Suvarna Shri S.K. Jain Shri T.B. Subramaniam Shri Sanjeev A. Aggarwal Shri Ashok J. Aggarwal Shri Sunil Goyal Shri Kunal R. Aggarwal* Smt. Monika Seth * Non-Executive w.e.f

22 21 st Annual Report Shares held by Non-Executive Director Name of the Non-Executive Director Equity Shares held (No.) Shri Ramesh J. Aggarwal 1,82,749 Shri S.S. Gupta Nil Shri R.D. Suvarna 5,000 Shri S.K. Jain 2,500 Shri T.B. Subramaniam 2,500 Shri Ashok J. Aggarwal 1,84,079 Shri Sunil Goyal Smt Monika Seth Nil Nil Shri Kunal R. Aggarwal 92, Shareholders /Investors Grievance Committee: Composition: The Shareholders /Investors Grievance Committee comprises of the following members: 1. Shri S. S. Gupta Chairman (Non-Executive Independent Director) 2. Shri T. B. Subramaniam Member (Non-Executive Independent Director) 3. Shri Vijay J. Aggarwal Member (Vice Chairman-1 and Whole Time Director) 4. Shri Ashok J. Aggarwal Member (Non-Executive) Shri Ravi O. Sharma acts as the Compliance Officer. Scope of the Shareholders /Investors Grievance Committee: The said Committee inter-alia deals with various matters relating to redressal of shareholders and investors complaints like transfer/transmission of shares, non-receipt of balance sheet, non-receipt of dividends, etc. and also recommends measures to improve the performance of investor services. Meetings and Attendance: During the year ended 31 st March 2010, the Committee had six meetings i.e. on 11 th May, 2009, 10 th November, 2009, 10 th December, 2009,11 th January, 2010, 10 th February, 2010 and 10 th March, The attendance record of members is given in the table hereunder: Name of the Shareholders / Investor Grievance Committee members No. of meetings held No. of meetings attended Shri. Vijay J. Aggarwal 6 6 Shri. S. S. Gupta 6 6 Shri. Ashok J. Aggarwal 6 6 Shri T.B. Subramaniam 6 6 The Committee expresses satisfaction with the Company s performance in dealing with investors grievances and its share transfer system. As per the revised Clause 49 of the Listing Agreement and to expedite the process of share transfers, the Board has delegated the powers of share transfers and related matters to Shri S.S. Gupta, Shri T. B. Subramaniam and Shri Vijay J. Aggarwal, members of the Committee who shall attend to share transfer formalities at least once in a fortnight. 20

23 KISAN MOULDINGS LIMITED Details of Shareholders complaints received, not solved and pending during the Financial Year ended 31 st March, 2010: The Company has received and resolved one complaint from a shareholder during the year ended March 31, There were no unattended complaint as on March 31, Performance Review Committee: Composition: The Company has also set up a Performance Review Committee for periodical review of operations and formulation of short-term/long-term business strategy. The said Committee comprises of the following members : Shri Satish J. Aggarwal Chairman (Executive Director) Shri Sunil Goyal Member (Non-Executive Independent Director) Shri T. B. Subramaniam Member (Non-Executive Independent Director) Shri Sanjeev A. Aggarwal Member (Executive Director) Scope of the Performance Review Committee: The said Committee inter-alia, deals with various matters relating to performance of the Company like operations, future expansion plans, etc. Meetings and Attendance: During the year ended 31 st March 2010, the Committee had two meetings i.e. on 5 th November, 2009 and 2 nd January, The attendance record of members is given in the table hereunder: Name of the Shareholders / Investors Grievance Committee members No. of meetings held No. of meetings attended Shri. Satish J. Aggarwal 2 2 Shri. Sunil Goyal 2 2 Shri. Sanjeev A. Aggarwal 2 2 Shri T.B. Subramaniam 2 2 D. Annual General Meetings: Details of last three Annual General Meetings are given hereunder Year Date Venue Time /09/2007 Hotel Suba Galaxy, N.S. Phadke Road, Off Western Express Highway, Near Andheri East-West Flyover, Andheri (East), Mumbai /09/2008 Hotel Suba Galaxy, N.S. Phadke Road, Off Western Express Highway, Near Andheri East-West Flyover, Andheri (East), Mumbai /09/2009 Hotel Suba Galaxy, N.S. Phadke Road, Off Western Express Highway, Near Andheri East-West Flyover, Andheri (East), Mumbai P.M A.M A.M Special Resolution: 1. At the Annual General Meeting which was held on 21st September 2009, Special Resolution was passed for increase in number of directors from 12 to

24 21 st Annual Report th 2. At the Annual General Meeting which was held on 27 September 2008, Special Resolution for issue of 40,00,000 Optionally Fully Convertible Warrants on preferential basis in accordance with the Companies Act, 1956 read with SEBI (Disclosure & Investors Protection) Guidelines was passed. 3. Special Resolution for appointment of Mr. Satish J. Aggarwal as the Managing Director of the Company was passed in the Annual General Meeting held on 24 th September Postal Ballots: No special resolution was passed through Postal Ballot during the year. However the Company is in the process of obtaining Member s approval vide Postal Ballot under section 293(1)(a) for creation of mortgage/charge and/ hypothecation on all the immovable and movable properties; and increase in borrowing powers of the Board of Directors of the Company under section 293(1)(d) of the Companies Act, E. Disclosures: i. Related Party Transactions: There are no transactions of material nature with Directors/Promoters or any related entity, which will have any potential conflict with the interests of the Company at large. ii. Compliances by the Company: There is no non-compliance by the Company or any penalties, strictures imposed by the Stock Exchange, SEBI or any other statutory authority on any matter related to capital markets, during the last three years. iii. Whistle Blower Policy and Access of personnel to the Audit Committee: The Company has not established the non-mandatory requirement of Whistle Blower Policy. However, the Company s personnel have access to the Chairman of the Audit Committee in cases such as concerns about unethical behaviour, frauds and other grievances. No employee of the Company has been denied access to the Audit Committee. iv. Compliance with the Mandatory requirements and Implementation of the Non-mandatory requirements: The Company has complied with the mandatory requirements of the Corporate Governance Clause of Listing Agreement. The Company has not implemented the non-mandatory requirements enlisted by way of annexure to Clause 49 of the listing agreement except the constitution of Remuneration Committee. F. Means of Communication: i. The quarterly results of the Company are published in two newspapers in compliance with the provisions of Clause 41 of the listing agreement. Generally, the same are published in Business Standard or The Free Press Journal or Economic Times (English language) and Tarun Bharat or Navshakti or Dainiksagar or Lakshdeep (Marathi language). As the results of the Company are published in the newspapers, half-yearly reports are not sent to each household of shareholders. The quarterly results as well as the proceedings of the Annual General Meeting are submitted to the Bombay Stock Exchange Limited immediately after the conclusion of the respective meeting. ii. iii. No presentations were made to the institutional investors or to analysts during the year under review. The Management Discussion and Analysis Report forms a part of this Annual Report. G. Certificate on Corporate Governance: As required by Clause 49 of the Listing Agreement, a certificate issued by M/s Rathi & Associates, practicing Company Secretaries, regarding compliance of conditions of Corporate Governance is given as an annexure to this Report. 22

25 KISAN MOULDINGS LIMITED H. CEO Certification: As required by Clause 49 of the Listing Agreement, the CEO i.e. the Managing Director s certification is provided as an annexure to this Report. I. General Shareholders Information: i. Date, time and venue of Annual General Meeting of Shareholders 27 th September, 2010, A.M. At Mirage Hotel, International Airport Approach Road, Marol, Andheri (East), Mumbai ii. Financial Calendar (tentative and subject to change) Financial reporting for quarter ended June 30, 2010 : By August 14, September 30, 2010 : By November 14, December 31, 2010 : By February 14, March 31, 2011 : By May 15, Annual General Meeting for year ended 31 st March 2011 By September 30, iii. Dates of book closures 23 rd September, 2010 to 27 th September, (both days inclusive) iv. Dividend Payment On or after 27 th September, 2010 but within the statutory time limit of 30 days, subject to shareholders approval. v. Registered Office Tex Centre, K Wing, 3 rd Floor, 26 A Chandivali Road, Near HDFC Bank, Off. Saki Vihar Road, Andheri (East), Mumbai Tel. No.: , / 50 / 52. Fax No.: customercare@kisangroup.com Website: vi. Listing on Stock Exchange & fees for The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited and the Madhya Pradesh Stock Exchange. Annual Listing Fee as prescribed has been paid to the Bombay Stock Exchange Limited for the year (delisting application already submitted to the Madhya Pradesh Stock Exchange hence listing fees for the year are not paid). vii. Bombay Stock Exchange Code (BSE) viii. Disclosures regarding appointment / reappointment of Directors Pursuant to the provisions of Sections 255 & 256 of the Companies Act, 1956, Shri Ashok J. Aggarwal, Shri Ramesh J. Aggarwal and Shri R. D. Suvarna shall retire by rotation at the forthcoming Annual General Meeting. The Board has recommended to the shareholders, the re-appointments of Shri Ashok J. Aggarwal, Shri Ramesh J. Aggarwal and Shri R. D. Suvarna as the Directors. The detailed resume of the said retiring Directors are provided in the notice of the Annual General Meeting. 23

26 21 st Annual Report ix. Stock Market price data Monthly high and low at the Bombay Stock Exchange Limited for financial year ended 31 st March, 2010: Month High (Rs.) Low (Rs.) BSE Sensex (High) April, , May, , June, , July, , August, , September, , October, , November, , December, , January, , February, , March, , x. Performance in comparison to BSE Sensex: BSE Sensex xi. Registrar and Share Transfer Agent: Sharex Dynamic (India) Private Limited Unit 1, Luthra Industrial Premises, Safed Pool, Andheri Kurla Road, Andheri (East), Mumbai Tel. No.: , Fax No.: xii. Share Transfer System: Shares sent for physical transfer are generally registered and returned within a period of 30 days from the date of receipt, if the documents are clear in all respects. The Shareholders /Investors Grievance Committee meets as often as required. As per the revised Clause 49 of the Listing Agreement and to expedite the process of share transfers, the Board has delegated the powers of share transfers and related matters to Shri S.S. Gupta, Shri T. B. Subramaniam and Shri Vijay J. Aggarwal, members of the Shareholders /Investors Grievance Committee who shall attend to share transfer formalities as per the requirement. The total number of shares transferred in physical form during the year was 3,630 shares. 24

27 KISAN MOULDINGS LIMITED xiii. Distribution of Shareholding as on March 31, 2010: No. of Equity Shares held Shareholders Shares Number % to total Shareholders Number % to total Capital , ,58, , ,05, ,001-5, ,26, ,001-10, ,78, ,001 & above ,20, Total 4, ,89, xiv. Categories of Shareholding as on March 31, 2010: Category Shareholders Shares Number % to total Shareholders Number % to total Capital PROMOTER HOLDING Indian Promoters Total of promoter holding NON- PROMOTER HOLDING Institutional Investors FIIs Others Private Corporate Bodies Indian Public NRIs/OCBs Any Other (Shares in Transit) Total of non-promoter holding ,77, ,77, ,41,929 14,57,444 8,937 4, ,12, Grand Total ,89, xv. Dematerialization of shares and liquidity The shares of the Company are in compulsory DEMAT segment and are available for trading in the depository systems of both NSDL and CDSL under ISIN No. INE017C As on 31 st March 2010, 63,30,477 (after conversion of 19,51,625 warrants into Equity Shares) Equity Shares of the Company, forming 70.42% of the Share Capital of the Company, stand dematerialized. xvi. Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion date and likely impact on equity. During the year under review, as per the terms of the issue, the Company had converted 19,51,625 Warrants (out of 40,00,000 warrants) into Equity Shares. The balance 20,48,375 Warrants were also subsequently converted into Equity Shares on 5 th April, As on date of signing this report, the Company does not have outstanding Warrants pending conversion into Equity Shares. xvii. Plant Location - Survey No. 64/1, 63/1, 70, 71, 72, 74/1/1 village-mahagaon, Taluka-Palghar, Boisar, Dist, Thane (Maharashtra). - T-110/111, MIDC, Tarapur Boisar, Dist. Thane (Maharashtra). - Survey No. 34/1/1, Village - Umerkui, Silvassa D. & N.H. (U. T.). - Plot no and 80-89, Birkoni Industrial area, Mahasammund, Chattisgarh Plot No. 127/2, 128/1, Village Bir Plassi, Tehsil Nalgarh, Solan, Himachal Plot No. 5-A/5 Industrial Area No. 2, Dewas, Madhya Pradesh

28 21 st Annual Report xviii. Address for Correspondence: Sharex Dynamic (India) Private Limited Unit 1, Luthra Industrial Premises, Safed Pool, Andheri Kurla Road, Andheri (East), Mumbai Tel.No.: , Fax No.: xix. Name and Address of Compliance Officer : Shri Ravi O. Sharma Kisan Mouldings Limited Tex Centre, K Wing, 3rd Floor, 26 A Chandivli Road, Near HDFC Bank, Off. Saki Vihar Road, Andheri (East), Mumbai Tel. No.: , / 50 / 52. Fax No.: PRACTICING COMPANY SECRETARIES CERTIFICATE ON CORPORATE GOVERNANCE To, The Members of Kisan Mouldings Limited We have examined the compliance of conditions of Corporate Governance by Kisan Mouldings Limited (the Company) for the year ended March 31, 2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchange. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examinations were limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. As per the records of the Company, there were no investor grievances remaining unattended for a period exceeding one month against the Company. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For and on behalf of Rathi & Associates Company Secretaries Place : Mumbai Date : 29 th May, 2010 Narayan Rathi Partner FCS No.: